The a16z Show "Is there an AI bubble?” Gavin Baker and David George
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Oct 30, 2025 
Gavin Baker, Managing Partner and CIO of Atreides Management, dives deep into the evolving landscape of AI alongside David George, General Partner at a16z. They compare today's AI investments to the 2000 telecom bubble, asserting that we're not in a bubble. The conversation explores the trillion-dollar data center buildout, the competitive dynamics among chipmakers like NVIDIA and Google, and how infrastructure investments may yield better returns than app-layer ventures. Ultimately, they discuss the future of SaaS and the implications of AI on business models.
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No Dark GPUs, No Classic Bubble
- Gavin Baker argues we are not in an AI bubble today and compares it to the 2000 telecom bubble.
- He highlights there are no “dark GPUs” and current GPU spend shows positive ROI so far.
Early GPU Spend Raised ROICs
- Major public companies that ramped CapEx have seen about a 10-point increase in ROIC since spending on GPUs.
- Gavin views the ROI on AI spending so far as clearly positive, supporting continued investment.
Adoption And Deep Pockets Reduce Risk
- David George emphasizes adoption is broad because AI tools are instantly distributable via APIs and cloud platforms.
- He notes the main spenders have huge cash and free cash flow buffers to fund buildout without a crash.